Working Paper No. 12-13:
What if Kelo v. City of New London Had Gone the Other Way?

Author(s):

Abstract:

Kelo v. City of New
London
is one of the most controversial decisions in U.S. Supreme Court history. The Kelo Court held that the Public Use
Clause of the Fifth Amendment allows government to condemn private property and
transfer it to other private parties for purposes of “economic development.”
This Article considers the question of what might have happened if the Supreme
Court decided Kelo v. City of New London
in favor of the property owners. Such counterfactual analysis may seem
frivolous. But it is, in fact, useful in understanding constitutional history.
Any assessment of the impact of a legal decision depends on at least an
implicit judgment as to the likely consequences of a ruling the other way. Analysis
can be improved by making these implicit counterfactual assumptions clear and
systematically considering their implications.

Part
I briefly describes the Kelo case and
its aftermath, focusing especially on the massive political backlash. That
backlash led to numerous new reform laws. However, many of them turned out to
be largely symbolic. Part II discusses
the potential value of a counterfactual analysis of Kelo. It could help shed light on a longstanding debate over the
effects of Supreme Court decisions on society.
Some have argued that court decisions have little impact, mostly
protecting only those rights that the political branches of government would
protect of their own accord. Others contend that this pessimistic view
underrates the potential effect of Supreme Court decisions.

Part
III considers the possible legal effect of a ruling in favor of the property
owners. Such a decision could have taken several potential forms. One
possibility is that the Court could have adopted the view advocated by the four
Kelo dissenters: that economic development condemnations are categorically
forbidden by the Public Use Clause. This would have provided strong protection
to property owners and significantly altered the legal landscape. On the other hand, the Court could easily
have decided in favor of the property owners on one of two narrower grounds.
Such a ruling would have led to much weaker protections for property owners.

Part IV weighs the
potential political impact of a decision favoring the property owners. Such an
outcome might have forestalled the massive political backlash that Kelo caused. Ironically, a narrow ruling
in favor of the owners that did not significantly constrain future takings
might have left the cause of property rights worse off than defeat did. On the
other hand, a strong ruling categorically banning economic development takings
would likely have done more for property rights than the backlash did,
especially considering the uneven nature of the latter. Furthermore, political
movements sometimes build on legal victories, as well as defeats, as happened
in the case of the Civil Rights movement in the wake of Brown v. Board of Education. It is possible that property rights
advocates could have similarly exploited a victory in Kelo.